Getting The Most Out Of A Nextgen Advisor

Attracting Nextgen talent has become a major talking point across the industry. Much of the focus has been on the need for diversity and for creating a ready pool of successors for the growing number of advisors nearing retirement age. One overlooked aspect of the conversation is the fact that often senior advisors and practices fail to establish a solid foundation for maximizing the Nextgen advisor in the short term while developing them into a sound leader who can take over in the future. Luckily, it only takes a little bit of pre-planning, clear communication, and the right balance of incentives and guidance to ensure that a practice is getting the most out of a Nextgen advisor.

Define Roles and Expectations

One of the biggest issues that manifests when a Nextgen advisor is brought on board arises because roles and expectations weren’t clearly defined and communicated at the beginning. The firm owners will become frustrated because their expectations aren’t met, while Nextgen advisors will become frustrated because they feel that they are performing at or above expectations based on their assumptions of the role. Its best to define the role and what is expected before a Nextgen advisor is hired. This includes defining expectations around business development/sales, client service, client group/segments, and back-office responsibilities, among others.

Monitor and Incentivize Desired Actions

According to Peter Drucker, “What gets measured gets done.” A principle for success in any business relationship is to identify key activities that must be done and what metrics matter most to the role and to the practice. Then build compensation and other incentives in a way that encourages the results and actions you desire. Too often, practice leaders build out compensation packages that aren’t tied to results or that incentivize the wrong behavior. Leaders can also fail to monitor and manage the activities they want to see their Nextgen advisor complete. When an advisor knows they are being watched and held accountable for certain goals and activities, they will make sure they get done.

Provide Training and Mentorship

Even the best candidate won’t fully reach their potential without training and guidance. Ongoing professional development paired with mentoring from internal leaders and other industry professionals is essential to fully developing a person as an advisor and a future practice leader. This includes both formal opportunities such as certifications, firm level training programs, and other courses, as well as informal training from shadowing senior advisors, casual conversations and feedback from supervisors, and modeling of behavior by peers and superiors.

Create a Path to Ownership

People work harder and are more conscientious when they have a stake in the outcome.A Nextgen advisor will take more initiative to learn and grow as well as to engage in activities for the good of the practice when they know they are working toward or already have an ownership stake in the practice. In short, they want to know that they have a future, one that will let them grow and flourish professionally and provide for them personally. Creating a pathway to partnership (Should we add a hyperlink to our previous article on this topic?  This was Ty’s idea.) is a key element to cultivating a Nextgen advisor into a true successor.

Again, hiring a Nextgen advisor doesn’t automatically mean success for the advisor or the practice. To truly get the most out of the investment, practice leaders need to define what matters and what’s expected while creating incentives to match the desired results. They must also provide ongoing professional development and guidance in order to ensure that the next generation is truly ready to serve the client and to lead the practice.